Little joy in Budget for lowest paid

EVEN on a budget of $150 a week Kassie Kelly won't notice the latest round of tax cuts.

Ms Kelly, 23, a Lismore student and mother who works part-time with no Government allowances, is one of the thousands of low-income earners given a 2 per cent tax cut in Tuesday's Budget.

The tax cuts yesterday came under fire from the Labor Party and the Australian Council of Social Services (ACOSS) for offering big cuts to the wealthy while giving a maximum of only $6 a week to the poor.

Ms Kelly wishes. On her income of $7800 a year, of which $1800 is taxed, Ms Kelly can look forward to a total cut of $36 a year, or 70 cents a week.

"It's not going to make a difference to my lifestyle," she said. "I live with my Mum, so that helps. But it's pretty hard to get by.

"You just stick with the essentials and get Home Brand everything."

Prime Minister John Howard yesterday defended the tax cuts which, at the other end of the scale, delivers a 5 per cent cut to people earning between $70,000 and $95,000.

He said the cuts were made largely in response to National Workers Union secretary Bill Shorten's complaint that steel workers doing overtime were being pushed into a higher tax bracket.

Mr Howard described the tax system as 'swings and roundabouts', saying the wealthy, while getting a larger tax cut, missed out on the family tax benefit.

Northern Rivers Social Development Council chairwoman, and the ALP's Lismore branch secretary, Jenny Dowell said the Government should have spent its $9.2 billion surplus on services, infrastructure and welfare.

"It's disgraceful. It's like a family having $1000 in the bank and the kids going to school without shoes," she said.

Cr Dowell attacked changes to the parenting payment, saying moves to force low-income parents back to work and put new applicants for the payment on to Newstart from July 2006 would leave them $20 to $40 worse off.